Wa/2438/2015 Of The Agricultural Income Tax v. Gehana Gold Palace (P) Ltd

C.R. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMASFRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2312 OF 2015 AGAINST THE JUDGMENT DATED 24.02.2015 IN WPC 4664/2012 OF HIGHCOURT OF KERALA, ERNAKULAM APPELLANT/ RESPONDENT IN THE W.P.(C) : THE COMMERCIAL TAX OFFICER, 3RD CIRCLETHRISSUR, DEPARTMENT OF COMMERCIAL TAXES, THRISSUR-680 001. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C) : M/S. CHUNGATH JEWELLERY,M.G.ROAD, THRISSUR-680001, A PARTNERSHILP FIRM REGISTERED UNDER THE INDIAN PARTNERSHIP ACT REPRESENTED BY ITS PARTNER SHRI.C.P.PAUL, CHUNGATH HOUSE, CHALAKKUDY – 680 307. BY ADVS.SRI.RAJU JOSEPH (SR.)SRI.C.JOSEPH ANTONYSRI.K.T.POULOSE KORATTY THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARDON 28.07.2021, ALONG WITH W.A.NOS.2316, 2334, 2337, 2338,2347, 2355, 2362, 2363, 2365, 2384, 2391, 2438of 2015, W.P.(C).NOS.9177 & 13336 of 2012, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING : IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMASFRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2316 OF 2015 AGAINST THE JUDGMENT DATED 24.02.2015 IN WPC 6434/2012 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANT/ RESPONDENT IN THE W.P.(C): 1ASSISTANT COMMISSIONER (KVAT) COMMERCIAL TAXES, SPECIAL CIRCLE, MALLAPPURAM, PIN - 676 131. 2STATE OF KERALAREPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C) : MALABAR PRECIOUS JEWELS PVT. LTD.MASHREQ TRADE CENTRE, CALICUT ROAD, PERINTHALMANNA,MALAPPURAM DISTRICT, REPRESENTED BY ITS DIRECTOR M.ABDUL MAJEED.BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.S.HARIHARAN NAIR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021, ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943 WA NO. 2334 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 21591/2012 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANT/ RESPONDENT IN THE W.P.(C): THE ASSISTANT COMMISSIONER (ASSESSMENT), COMMERCIALTAXES, KOZHIKODEPIN – 673 001 BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C).: MALABAR GOLD PALACE PVT.LTD., MALABAR GATE, RAM MOHAN ROAD, KOZHIKODE - 4, REPRESENTED BY ITS DIRECTOR KP. VEERANKUTTY BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.S.HARIHARAN NAIR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021, ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMASFRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2337 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 7451/2012OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.C. : 1THE ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE-II, KOZHIKODE 2STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM – 695 001 BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C).: MALABAR RETNAMAHAL (P) LTD., 12/580 A, MUSCOT TOWER, BYPASS ROAD, VATAKARA – 673 104, REPRESENTED BY ITS DIRECTOR, SRI.V.S.SHEREEJ BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.S.HARIHARAN NAIR & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMASFRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2337 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 7451/2012OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.C. : 1THE ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE-II, KOZHIKODE 2STATE OF KERALA, REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM – 695 001 BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C).: MALABAR RETNAMAHAL (P) LTD., 12/580 A, MUSCOT TOWER, BYPASS ROAD, VATAKARA – 673 104, REPRESENTED BY ITS DIRECTOR, SRI.V.S.SHEREEJ BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.S.HARIHARAN NAIR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021, ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON 06.08.2021 DELIVERED THE FOLLOWING: 5 IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMASFRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2338 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 9278/2013 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.C. : 1THE ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE, KANNUR, PIN – 670 002SPECIAL CIRCLE, KANNUR, PIN – 670 002 2THE INTELLIGENCE OFFICER (IB), COMMERCIAL TAXES, KANNUR, PIN – 670 002 3STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO THE GOVRNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM – 695 001 BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C).: MALABAR GOLD SUPER MARKET PVT.LTD, NETHAJI ROAD, KANNUR, REPRESENTED BY ITS DIRECTOR SRI. MUJEEB REHMAN BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.S.HARIHARAN NAIR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021, ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON 06.08.2021 DELIVERED THE FOLLOWING: 6 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943 WA NO. 2347 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 3740/2012 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.C: 1THE ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE, PALAKKAD, PIN - 678 001 2STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001 BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C) : MALABAR GOLD, MALABAR BUSINESS CENTRE(P) LTD, MALABAR FORT, G.B ROAD, PALAKKAD, REPRESENTED BY ITS DIRECTOR BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.S.HARIHARAN NAIR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021, ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: 7 IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMASFRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2355 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 128/2013 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/RESPONDENTS AND ADDL.4TH RESPONDENT IN THE W.P.(C): 1ASSISTANT COMMISSIONER, COMMERCIAL TAXESSPECIAL CIRCLE, KANNUR, PIN - 670 002. 2INTELLIGENCE OFFICER (IB),COMMERCIAL TAXES, KANNUR, PIN - 670 002. 3STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001. 4THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, KANNUR - 670 002. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C): THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMASFRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2355 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 128/2013 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/RESPONDENTS AND ADDL.4TH RESPONDENT IN THE W.P.(C): 1ASSISTANT COMMISSIONER, COMMERCIAL TAXESSPECIAL CIRCLE, KANNUR, PIN - 670 002. 2INTELLIGENCE OFFICER (IB),COMMERCIAL TAXES, KANNUR, PIN - 670 002. 3STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001. 4THE INSPECTING ASSISTANT COMMISSIONER, COMMERCIAL TAXES, KANNUR - 670 002. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C): MALABAR GOLD SUPER MARKET (KANNUR) (P) LTD.NETHAJI ROAD, KANNUR REPRESENTED BY ITS DIRECTOR SRI.M.P.AHAMMED BASHEER. BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.S.HARIHARAN NAIR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021, ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: 8 IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943 WA NO. 2362 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 6433/2012 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.(C): 1ASSISTANT COMMISSIONER-I (KVAT), COMMERCIAL TAXES, SPECIAL CIRCLE, MALAPPURAM - PIN 676 505. 2STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRTARIAT, THIRUVANANTHAPURAM - 695 001. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C) : MALABAR DAZZLE INDIA (P) LTD,CRESCENT PLAZA, NATIONAL HIGHWAY, EDAPPAL, MALAPPURAM DISTRICT, REPRESENTED BY ITS DIRECTOR K.P.VEERANKUTTY. MALAPPURAM DISTRICT, REPRESENTED BY ITS DIRECTOR BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.S.HARIHARAN NAIR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021, ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMASFRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2363 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 6680/2013 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.(C) : 1ASSISTANT COMMISSIONER (KVAT) COMMERCIAL TAXES,SPECIAL CIRCLE, KOTTAYAM - 686 001. 2STATE OF EKRALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPRUAM - 695 001., BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C) : SWARNAKAMMAL JEWELS (INDIA) (P) LTD.,BAKER JUNCTION, KOTTAYAM, REPRESENTED BY ITS DIRECTOR. BY.ADV.S.ANIL KUMAR (TRIVANDRUM) THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021, ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: 10 IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943 WA NO. 2365 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC14691/2013 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.(C) : 1THE INTELLIGENCE OFFICER (IB)COMMERCIAL TAXES, KANNUR - 670 002. 2THE ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE,KANNUR, PIN - 670 002.3STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM – 695 001 4THE INSPECTING ASSISTANT COMMISSIONER,COMMERCIAL TAXES, KANNUR - 670 002. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ 10 IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943 WA NO. 2365 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC14691/2013 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.(C) : 1THE INTELLIGENCE OFFICER (IB)COMMERCIAL TAXES, KANNUR - 670 002. 2THE ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE,KANNUR, PIN - 670 002.3STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM – 695 001 4THE INSPECTING ASSISTANT COMMISSIONER,COMMERCIAL TAXES, KANNUR - 670 002. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C): MALABAR ORNAMENTS PVT. LTD.,PRANAM BUILDINGS, A.V.K.NAIR ROAD, THALASSERY, KANNUR DISTRICT, PIN - 670 101, REPRESENTED BY ITS DIRECTOR BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.S.HARIHARAN NAIR THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021,ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943 WA NO. 2384 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.2015 IN WPC 9456/2013 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.(C) : 1THE ASSISTANT COMMISSIONER, COMMERCIAL TAXES, SPECIAL CIRCLE, KANNUR, PIN - 670 002. 2STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C) : MALABAR ORNAMENTS (P) LTD., PRANAM BUILDERS, A.V.K.NAIR ROAD, THALASSERY, KANNUR DISTRICT, PIN - 670 101, REPRESENTED BY ITS DIRECTOR. BY ADV.SRI.S.ANIL KUMAR (TRIVANDRUM) THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021, ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMASFRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943 WA NO. 2391 OF 2015 AGAINST THE COMMON JUDGMENT DATED 24.02.IN WPC 6435/2012 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANTS/ RESPONDENTS IN THE W.P.(C) : 1THE ASST.COMMISSIONER (KVAT) KASARAGOD,COMMERCIAL TAXES, SPECIAL CIRCLE, KASARAGOD-671121. 2STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM – 695 001 BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C) : M/S.MALABAR COLLECTIONS (PVT) LTD,M.G.ROAD, KASARAGOD – 671 121, REPRESENTED BY ITS DIRECTOR E.ABDUL JALEEL. BY ADV.SRI.S.ANIL KUMAR (TRIVANDRUM) THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021,ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2438 OF 2015 AGAINST THE COMMON JUDGMENT IN W.P.(C) 21596/2012 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANT/ RESPONDENT IN THE W.P.(C): THE AGRICULTURAL INCOME TAX AND COMMERCIAL TAX OFFICER, SULTHAN BATHERY, WAYANAD DISTRICT, PIN - 673 592. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C) : GEHANA GOLD PALACE (P) LTD,OPPOSITE SULTHAN BATHERY GRAMA PANCHAYATH, MAIN ROAD, SULTHAN BATHERY,PIN – 673 592,REPRESENTED BY ITS DIRECTOR T.A.ABDUL NASAR. IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WA NO. 2438 OF 2015 AGAINST THE COMMON JUDGMENT IN W.P.(C) 21596/2012 OF HIGH COURT OF KERALA, ERNAKULAM APPELLANT/ RESPONDENT IN THE W.P.(C): THE AGRICULTURAL INCOME TAX AND COMMERCIAL TAX OFFICER, SULTHAN BATHERY, WAYANAD DISTRICT, PIN - 673 592. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ RESPONDENT/ WRIT PETITIONER IN THE W.P.(C) : GEHANA GOLD PALACE (P) LTD,OPPOSITE SULTHAN BATHERY GRAMA PANCHAYATH, MAIN ROAD, SULTHAN BATHERY,PIN – 673 592,REPRESENTED BY ITS DIRECTOR T.A.ABDUL NASAR. BY ADV.SRI.K.S.HARIHARAN THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021,ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WP(C) NO. 9177 OF 2012 PETITIONER : MALABAR GOLD JEWELS (TIRUR)PVT.LTD.,REPRESENTED BY ITS DIRECTOR. TIRUR, MALAPPURAM DISTRICT, BY ADVS.SRI.S.ANIL KUMAR (TRIVANDRUM)SRI.K.UMAMAHESWARSRI.K.S.HARIHARAN NAIR RESPONDENS : 1SALES TAX OFFICERPIN -673 621. TIRUR, MALAPPURAM DISTRICT, 2STATE OF KERALA,REPRESENTED BY THE PRINCIPAL SECRETARY TO GOVERNMENT, TAXES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM - 695 001. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021,ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE S.V.BHATTI & THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS FRIDAY, THE 6 DAY OF AUGUST 2021 / 15TH SRAVANA, 1943WP(C) NO. 13336 OF 2012 PETITIONER : M/S. FASHION JEWELLERY,MAIN ROAD, CHALAKUDY, THRISSUR DISTRICT REPRESENTED BY ITS PARTNER C.P.PAUL. BY ADVS.SRI.HARISANKAR V. MENONSMT.MEERA V.MENONSRI.MAHESH V.MENON RESPONDENTS : 1COMMERCIAL TAX OFFICER, CHALAKUDYPIN-680307. 2STATE OF KERALAREPRESENTED BY ITS SECRETARY, TAXES DEPARTMENT, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM – 695001. BY SPL.GOVERNMENT PLEADER (TAXES)ADV.MOHAMMED RAFIQ THIS WRIT APPEAL HAVING BEEN FINALLY HEARD ON 28.07.2021,ALONG WITH WA.2312/2015 AND CONNECTED CASES, THE COURT ON06.08.2021 DELIVERED THE FOLLOWING: CR JUDGMENT W.A.Nos.2312, 2316, 2334, 2337, 2338, 2347, 2355,2362, 2363, 2365, 2384, 2391, 2438 of 2015 &W.P.(C).Nos.9177 & 13336 of 2012 Dated this the 6[th] day of August, 2021 Bechu Kurian Thomas, J. When the compounded tax for dealers in ornaments orarticles of gold, or other metals were retrospectively amended forthe year 2011-12, the dealers raised a challenge against thecollection of differential tax. Several writ petitions were filed beforethis Court. The learned Single Judge allowed all the writ petitionsafter concluding that the differential tax attempted to be collectedfrom the writ petitioners for the assessment year 2011-12 waslegally unsustainable and accordingly quashed all the impugnedorders/demand notices. The department has come up in theseappeals contending that the retroactive operation of thecompounded rate of tax was within the scope of the Government'sauthority and the consequential collection of differential tax waslegally valid. 2. This batch consists of 13 writ appeals and two writ 2. This batch consists of 13 writ appeals and two writ petitions. W.A.No.2312/2015 is treated as the main appeal. Thequestions arising for consideration are common and hence weheard all the writ appeals and the writ petitions together. Since thecircumstances are similar in all these cases, we confine the factualnarrative that too, briefly, to the circumstances pleaded in theleading case. 3. The writ petition was preferred when the dealer was directed to pay the balance tax due under the newly introducedcompounded rate of tax. It was contended that the compoundedtax being in the nature of a contract, the Government was estoppedfrom demanding compounded tax at a higher rate after Ext.P1sanction was granted by the assessing officer to pay tax under thecompounded scheme, that too in instalments. 4. Section 8(f) of the Kerala Value Added Tax Act, 2003 (for short 'the KVAT Act') provides for compounded tax for dealersin ornaments and articles of gold, etc. On 24-02-2011 a finance billwas presented before the 12[th] Kerala Legislative Assembly, as BillNo.426 (hereinafter referred to as the 'First Bill'). The Bill proposeda revision of the existing rates for compounded tax under section 8(f) of the KVAT Act from 01-04-2011. Even though the Bill was notpassed by the legislative assembly, due to statutory prescriptionsand declarations made in the Bill, the tax implications under theFirst Bill came into effect from the proposed date i.e: 01-04-2011.The year 2011 was the year of elections to the Kerala LegislativeAssembly. The 12th Kerala Legislative Assembly was thereforedissolved on 14-05-2011 and a new Government took charge.Thereafter the new Government brought a fresh Finance Bill on19.07.2011 as Bill No.20 (hereinafter referred to as the 'SecondBill') of the 13[th] Kerala Legislative Assembly. The second bill waspassed on 08-11-2011 as Kerala Finance Act 16 of 2011,(hereinafter referred to as 'Act 16 of 2011'). 5. The 1[st] respondent is a dealer in ornaments andarticles of gold. 1[st] respondent (hereinafter referred to as thedealer) had opted to pay tax at compounded rates from the year2009-10 onwards. The dealer was permitted by Ext.P1 order of theassessing authority to pay tax at the compounded rate prevalent ason 01-04-2011 for the year 2011-12 on the basis of the ratesprescribed under the First Bill. However, after the coming into forceof the amended provisions, the assessing officer demanded thedifferential tax allegedly due from the dealer on the basis of the amended provisions. The demand was challenged by the dealer inthe writ petition. A relief of declaration was sought for declaringthat the provisions of the Second Bill which resulted in Finance Act16 of 2011 shall not affect the vested rights accrued to the dealeron account of the order permitting it to pay tax at compoundedrates on the basis of the First Bill. 6. By the judgment under challenge, the learned Single Judge held that once the assessee opts to pay tax at compoundedrates and the said option was accepted, there came into existence acontract which neither side could resile from. It was also held thatthe validation clause in Act 16 of 2011 made it legally impermissibleand unfair to proceed against the dealers with the demand fordifferential tax. As mentioned earlier, the said judgment ischallenged by the Department. The writ petitions connected withthis batch of writ appeals are those which were omitted to betagged along with the connected cases before the learned SingleJudge. They raise the same issue as in the other writ petitions andare hence being considered along with the appeals. 7. We heard the learned Senior Government PleaderSri.Mohammed Rafiq on behalf of the appellant. We also heardSenior Advocate Raju Joseph, Adv. Harishankar V. Menon and Adv. Anil Kumar on behalf of the respondents. 7. We heard the learned Senior Government PleaderSri.Mohammed Rafiq on behalf of the appellant. We also heardSenior Advocate Raju Joseph, Adv. Harishankar V. Menon and Adv. Anil Kumar on behalf of the respondents. 8. Under S. 8(f)(i) of the KVAT Act, the rate ofcompounded tax for dealers who opted to pay tax under the sectionfor the first time was marginally higher than those who had optedto pay the tax at compounded rates from the previous year or evenbefore that period. Section 8(f)(v) of the Act dealt with the categoryof dealers who had opted for compounded tax from the previousyears. It may be essential to extract section 8(f)(i) and S.8(f)(v) ofthe KVAT Act as it stood on 31-03-2011. (Explanations 1 to 5 and7 & 8 and sub-clauses (ii) to (iv) of S. 8(f) are not extracted as theyare not relevant for the purpose of these appeals).S.8(f)(i) as on31.03.2011 was as follows; S.8. Payment of tax at compounded rates.- Notwithstanding anything contained in section 6,- (f)(i) any dealer in bullion or ornaments or wares or articles ofgold, silver or platinum group metals including diamond may athis option, instead of paying tax on their sale in the State inrespect of such goods in accordance with the provisions ofsection 6, may pay tax at the rate of,-- (a) one hundred and fifteen per cent, in case the totalturnover of the dealer opting to pay tax under thisclause, for the preceding year was above rupees tenlakhs or below;turnover of the dealer opting to pay tax under thisclause, for the preceding year was above rupees tenlakhs or below;(b) one hundred and twenty percent, in case the totalturnover of the dealer opting to pay tax under thisclause, for the preceding year was above rupees tenlakhs and up to rupees forty lakhs;turnover of the dealer opting to pay tax under thisclause, for the preceding year was above rupees tenlakhs and up to rupees forty lakhs; (c)one hundred and thirty five percent, in case the totalturnover of the dealer opting to pay tax under thisclause, for the preceding year was above rupees fortylakhs and up to rupees one crore; and atturnover of the dealer opting to pay tax under thisclause, for the preceding year was above rupees fortylakhs and up to rupees one crore; and at (d)one hundred and fifty percent, in case the total turnoverof the dealer opting to pay tax under this clause, for thepreceding year was above rupees one crore and above;of the dealer opting to pay tax under this clause, for thepreceding year was above rupees one crore and above; of the highest tax payable by him as conceded in thereturn or accounts, or tax paid by him under this Act,whichever is higher, for a year during any of the threeconsecutive years preceding that to which such optionrelates. Explanation 6 : Where a dealer has opted for payment oftax under this clause for the first time in 2010-11 and hascommenced business only in 2009-10 and the tax payable asper return or account during 2009-10 is less than the output taxpayable, then the tax payable for 2009-10 shall be notionallyre-determined on the basis of output tax for determining the taxliability for 2010-11; (v). Where a dealer had paid tax under this clause for theprevious year, the tax payable for the succeeding year underthis clause shall be, (a). One hundred and five percent of such tax paid during theprevious year, in case their turnover for the above goods for thepreceding year was rupees ten lakhs or below; (b). one hundred and ten percent of such tax paid during theprevious year, in case their turnover for the above gods for thepreceding year was above rupees ten lakhs and up to rupeesforty lakhs; (c). one hundred and fifteen percent of such tax paid duringthe previous year, in case their turnover for the above goods forthe preceding year was above rupees forty lakhs and up torupees one crore; and (v). Where a dealer had paid tax under this clause for theprevious year, the tax payable for the succeeding year underthis clause shall be, (a). One hundred and five percent of such tax paid during theprevious year, in case their turnover for the above goods for thepreceding year was rupees ten lakhs or below; (b). one hundred and ten percent of such tax paid during theprevious year, in case their turnover for the above gods for thepreceding year was above rupees ten lakhs and up to rupeesforty lakhs; (c). one hundred and fifteen percent of such tax paid duringthe previous year, in case their turnover for the above goods forthe preceding year was above rupees forty lakhs and up torupees one crore; and (d) one hundred and twenty five percent of such tax paidduring the previous year, in case their turnover for the above goods for the preceding year exceeded rupees one crore : Provided that the tax payable under this sub-clause by thedealers covered under Explanation 6 of this clause shall be atthe appropriate percentage of tax mentioned in (a), (b), (c) or(d) above, of the tax re-determined under the said Explanation.; (vi)Where a dealer who opts for compounding under thisclause has been transacting business under a brand name, thecompounded tax payable under this clause shall not be less thanthe compounded tax payable and the business been run as abranch of the franchisee or of other franchisees.” 9. The above compounded rate of tax for dealers falling under section 8(f) was sought to be revised with effect from 01-04-2011 by the First Bill as follows: (ii) in clause (f),- In sub-clause (i), in Explanation 6, for the figures “2009-10”and “2010-11”, wherever they occur, the figures “2010-11”and “2011-12” shall respectively be substituted; After sub-clause (i), the following sub-clause shall be inserted,namely:- “(ia) Notwithstanding anything contained in this clause, adealer shall not be allowed to opt for the payment of tax underthis clause unless he has conducted business up to a full yearas on the first day of April of the year to which the optionrelates.”' (c). In sub-clause (v),- (i) In item (a), for the words “one hundred and five percentof such”, the words “the same amount of” shall be substituted; (ii) In item (b), for the words “one hundred and ten percent”,the words “one hundred and five percent” shall be substituted; (d) Sub-clause (vi) shall be omitted;” 10. The changes brought about by the Second Bill which culminated as Act 16 of 2011 were as follows; “(v). Where a dealer had paid tax under this clause forthe previous year, the tax payable for the succeeding yearunder this clause shall be calculated at the rates mentioned initem (i) or (ii) below, whichever is higher- (i) (a) at the same amount of tax paid during theprevious year, in case their turnover for the above goods forthe preceding year was rupees ten lakh or below; (b) at one hundred and five percent of such tax paidduring the previous year, in case their turnover for the abovegoods for the preceding year was above rupees ten lakh and upto rupees forty lakh; (c) at one hundred and fifteen percent of such tax paidduring the previous year, in case their turnover for the abovegoods for the preceding year was above rupees forty lakh andup to rupees one crore; and (d) at one hundred and twenty five percent of such taxpaid during the previous year, in case their turnover for theabove goods for the preceding year exceeded rupees one crore: Provided that the tax payable under this sub-clause bythe dealers covered under Explanation 6 of this clause shall beat the appropriate percentage of tax mentioned in (a), (b), (c)or (d) above, of the tax re-determined under the saidExplanation. (ii) 1.25% of the turnover of sales of the goods coveredunder this clause, for the previous year.”; 11. The above changes for clarity are reduced into a tabular column as follows: 12. It is pertinent to mention that if a declaration under (d) at one hundred and twenty five percent of such taxpaid during the previous year, in case their turnover for theabove goods for the preceding year exceeded rupees one crore: Provided that the tax payable under this sub-clause bythe dealers covered under Explanation 6 of this clause shall beat the appropriate percentage of tax mentioned in (a), (b), (c)or (d) above, of the tax re-determined under the saidExplanation. (ii) 1.25% of the turnover of sales of the goods coveredunder this clause, for the previous year.”; 11. The above changes for clarity are reduced into a tabular column as follows: 12. It is pertinent to mention that if a declaration under the provisions of the Kerala Provisional Collection of Revenues Act1985, is incorporated in any Bill that is introduced in the LegislativeAssembly, the tax or fee proposed to be brought in under the Bill,shall have effect from 1[st] of April following the date of introductionof the Bill, and the said declaration shall have the force of law. Thisis provided for in sections 3 and 4 of the above mentioned Act. Since the First Bill, introduced in the Legislative Assembly had adeclaration as stipulated in the Kerala Provisional Collection ofRevenues Act 1985, the imposition of the new rate of tax under theFirst Bill came into effect from 01-04-2011. 13.As per the provisions of Article 196(5) of theConstitution of India, a Bill pending before the Legislative Assemblyof a State shall lapse on dissolution of the Assembly. The 12[th]Kerala Legislative Assembly was dissolved on 14-05-2011 and thus,the First Bill lapsed as on that date, by operation of law. 14. To overcome the legal hurdle of the lapse of the First Bill, the Second Bill was introduced by the new Government on19-07-2011 which culminated in Act 16 of 2011. Though the FirstBill had lapsed, the tax collected and or continued to be collectedand the various actions initiated under lapsed Bill had to be giventhe authority of law to satisfy the requirement of Article 265 of theConstitution of India. Hence a validation clause was inserted in Act16 of 2011 which reads as follows; 12. Validation-(1) Notwithstanding the lapse of theKerala Finance Bill, 2011 (Bill No.426 of the 12[th] KeralaLegislative Assembly) (hereinafter referred to as the saidBill) and the cesser of force of law of the declared provisionsof the said Bill, anything done or any action taken, includingthe levy And collection of tax or duty, during the period fromthe 1[st] day of April, 2011 to the 19[th] day of July, 2011, byvirtue of the declared provisions contained in the said Bill,under the Kerala Surcharge on Taxes Act, 1957 (11 of 1957) or under the Kerala Tax on Luxuries Act, 1976 (32 of 1976)or under the Kerala Value Added Tax Act, 2003 (30 of 2004)(hereinafter referred to as the 'respective Acts'), as theystand amended by the said Bill, shall be deemed to be andto have always been, for all purposes, validly and effectivelydone or taken under the provisions of the respective Acts, asif the said amendments had been in force at all materialtimes. (2) Notwithstanding anything contained in therespective Acts during the period from 1[st] April, 2011 to the19[th] day of July,2011 during which the declared provisionscontained in the said Bill was in force, anything done or anysection taken by virtue of the said provisions of the said Bill,shall be deemed to have been validly done or taken underthe respective Acts and no action shall lie against any dealeror authority on the ground of short levy or refund of excesstax or duty and tax or duty collected, if any, by a dealer oran authority, as the case may be, shall be paid over to theGovernment. 15. The legislative power of the State Legislature (2) Notwithstanding anything contained in therespective Acts during the period from 1[st] April, 2011 to the19[th] day of July,2011 during which the declared provisionscontained in the said Bill was in force, anything done or anysection taken by virtue of the said provisions of the said Bill,shall be deemed to have been validly done or taken underthe respective Acts and no action shall lie against any dealeror authority on the ground of short levy or refund of excesstax or duty and tax or duty collected, if any, by a dealer oran authority, as the case may be, shall be paid over to theGovernment. 15. The legislative power of the State Legislature to amend the Act with retrospective effect, is neither disputednor challenged. It is settled that the power to legislatecarries with it the power to legislate retrospectively also[See M/s. J. K. Jute Mills Co. Ltd. v. State of U.P. andAnother, ;Mt. Jadao Bahujiv. The Municipal Committee, Khandwa and Another, ;M/s. Raghubar Dayal Jai Parkash and Othersv. The Union of India and Another, ;Stateof Karnataka and Others v. Karnataka Pawn BrokersAssociation and Others,[(2018) 6 SCC 363]. Though there are limitations to the power to legislate retrospectively, none of thedealers have questioned the retrospectivity in the instant cases. 16. The entire gamut of dispute in these cases therefore revolves around the interpretation of the validation clause asextracted earlier. The learned Government Pleader submitted thatthe validation clause was only a device for continuity in legislationto avoid a vacuum. It was also submitted that the validation clausein Act 16 of 2011 and the retrospectivity of the taxing provisionswere both distinct and separate and that since the legislature isvested with the power to impose rates of tax retrospectively, therates fixed as per Act 16 of 2011 shall be deemed to have been inoperation from 01-04-2011 and the differential tax was liable to becollected from the dealers. 17. The learned counsel for the dealers on the other hand submitted that once compounding is permitted, it creates acontract which cannot be interfered with otherwise than throughrectification under section 63 of KVAT Act or in revisionalproceedings. Though the Counsel in unison submitted that theyhave no quarrel with the proposition on the power of retrospectivityof taxing statutes they submitted that the words "save as otherwiseprovided" in Act 16 of 2011 rendered the retrospective operation governed by the validation clause. In other words, according to allthe learned Counsel the retrospectivity is subject to the validationclause. 18. It is true, as stated by the learned Single Judge,that when an assessee opts to pay tax at compounded rates andsuch an option is accepted by the authorities under the KVAT Act,either expressly by an order or impliedly through their conduct,there comes into existence a contract from which neither sidecan resile. Reliance upon the decision in Bhima Jewelleryv. Asst. Commissioner (Assessment) [(2014) 71 VST 110(SC)] is relevant for the said proposition. However, in the instantcase, the situation is different. The commercial tax officer neverproposed to resile from the permission granted for payment of taxat compounded rates. The assessing officer only demanded thedifferential tax brought about by the retrospective operation of theamended provisions. Since it is no longer res integra that State isentitled to bring in tax with retrospective operation, there is nolegal embargo in demanding the differential tax, even in respect ofcompounded tax, brought into the amendment with retrospectiveeffect. At this juncture, we remind ourselves that none of thedealers have challenged the rates of tax imposed by the amended provision. As long as there is no challenge against the amendedprovisions, it was incumbent for the assessing officers to recoverthe differential rate of tax. provision. As long as there is no challenge against the amendedprovisions, it was incumbent for the assessing officers to recoverthe differential rate of tax. 19. The second limb of the argument of the dealerswhich found favour with the learned Single Judge and which iscertainly impressive in a first blush is that in view of the validationclause brought in as Section 12 to Finance Act 16 of 2011, thecommercial tax officers were not entitled to proceed against thepetitioner with the demand for the differential tax. 20.Section 2 of Act 16 of 2011 commences with thewords "Save as otherwise provided in this Act". In the sixsub-clauses that follows, six different dates have been prescribed asthe dates on which the provisions come into force. The firstsub-section provides for coming into force of the provision on thefirst day of April 2005. Second sub-section mentions the date asfirst day of April 2007, the third sub clause mentions first day ofApril 2010 as the date of coming into force of that provision. Subclause (4) mentions first day of April 2011 as the date of cominginto force while sub clause (5) mentions 19-07-2011 as the date ofcoming into force of the said provisions. Sub clause (6) mentions“at once” as the date of coming into force of all the remaining provisions. Therefore, a conscious attempt is made by thelegislature to bring the provisions of the different clauses of theamended provisions to be applicable with effect from differentdates. We cannot be oblivious of the said intention of thelegislature, explicitly expressed through the different datesmentioned in the amended provisions. 21. The apparent confusion among the dealers iscreated on account of the wording in the validation clause of Act 16of 2011. On a deeper scrutiny of sub clause (2) of the validationclause, it can be understood that the language used in the saidprovision was not with a view to erase the retrospectivity brought inby the amended provisions but was intended only as a measure ofvalidating the First Bill which had by virtue of Article 196(5) of theConstitution lapsed. The First Bill was pending in the LegislativeAssembly of the State when the Assembly was dissolved. As perArticle 196(5) of the Constitution, a bill which is pending in theLegislative Assembly of a State, shall lapse on dissolution of theAssembly. The validation clause was included in Finance Act 16 of2011 to overcome the legal imbroglio that arose on account of thedissolution of the Assembly on 14.05.2011 and the subsequentpresentation of the Second Bill on 19.07.2011. The validation clause brings in a continuity and overcomes the vacuum created by thedissolution of the Assembly. 22. We can approach the validation clause through another angle. Sub-clause (1) of section 12 of Act 16 of 2011,refers to the lapse of the Bill and the cessation of the force of law ofthe declared provisions of the First Bill. This part overcomes thelapse of the the Bill caused by Article 196(5) of the Constitution.The first sub-clause of the validation section confers authority oflaw, post facto, for the imposition and collection of tax under theFirst Bill. Without the aforesaid validation clause, the provisions ofthe First Bill, which had already come into effect on account of thedeclaration under the Kerala Provisional Collection of Revenues Act,1985, would have had no force of law due to its subsequent lapse.The second sub-clause of the validation section after givingvalidation to the acts done or taken under the taxing statutes, givesan immunity to the dealer as well as the authorities under thetaxing statutes from any action being taken on the ground of shortlevy or excess tax or duty collected. The words “short levy orexcess tax or duty collected” as appearing in the validation clauseare with reference to the First Bill. It is not referring to the shortlevy or excess tax that may arise on account of the change of rate of tax brought in by Act 16 of 2011. It would be incongruous tointerpret the word 'short levy' in the validation clause as referringto the short levy arising on account of the Act 16 of 2011. Viewedin the above perspective, we have no hesitation to hold that theretrospectivity of tax or its collection brought in by the Finance Act16 of 2011 is not controlled by the validation clause in section 12 ofthat Act. 23. In this context it is fruitful to bear in mind theobservation of this Court in the decision in State of Keralav. M/s. Desire Diamond Jewellery (OTR No. 3 of 2010) that, acompounding application is only an application filed for payment oftax at compounded rate in accordance with the statute and not atthe rate prescribed by the party because the Act does not visualiseany such compounding on parties own terms. 24. We also find force in the argument of the learned Government Pleader that the decision in Varkisons Engineersv. State of Keralaand Another [(2009) 16 SCC 120], had notlaid down any proposition against retrospective operation ofcompounded tax. The facts in the said decision and the conclusionof the Court have a bearing. In the case of Varkisons Engineers(supra)whiletheapplication of the dealer for payment of tax at compounded rates was allowed on 09-04-2001, the Kerala FinanceAct, 2001 was brought into effect from 23-07-2001. There was noprovision for retrospective operation of the Act. The contentionraised therein was that the unit of assessment under thecompounded regime of tax being a full assessment yearcommencing from 1[st] April, the entire exercise of payment ofcompounded tax having been completed by 09-04-2001, in theabsence of any retrospective operation of the new rate of tax eitherexpressly or by necessary intendment, the new rate could not havebeen applied for an exercise that was already completed. It was inthe above circumstances that the Supreme Court set aside thejudgmen